The economy of São Tomé and Príncipe in 1997 remained heavily dependent upon international assistance, with just over 60% of the budget derived from grants; most of this came from the European Union. A major development program under way during the year included job creation and new health centres and medical equipment. Financed by the European Development Fund, the program was also providing technical assistance as well as new drainage, sanitation, and environmental protection facilities.

In May the government and the South African group Wadco signed an agreement to establish a customs-free zone on the west coast of Príncipe. Covering between 400 and 600 ha (1,000 and 1,500 ac), it was located near the island’s airport and could become the site of a deep-water port and provide services for oil operators in the Gulf of Guinea. In September there were indications that the country was considering joining the Central African Economic and Monetary Zone.

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country of central Africa, located on the Equator in the Gulf of Guinea. It consists of two main islands—São Tomé and Príncipe—and several rocky islets including Rôlas, south of São Tomé island, and Caroço, Pedras, and Tinhosas, south...